The wisdom of crowdfunding

The wisdom of crowdfunding
Michael French

By Michael French

February 28th 2012 at 9:30AM

After the success of Tim Schafer and Indie Game: The Movie, is Kickstarter all it's cracked up to be?

Indie Game: The Movie was funded in part using crowdsourcing site Kickstarter.

Pajot and Swirsky raised $23,341 on the site after posting a pitch and details of the movie they wanted to make. They raised, in fact, $8,341 more than their original proposed funding budget of $15,000.

Of course, you know about Kickstarter. Every developer has this month has heard about it after famed designer and Double Fine founder Tim Schafer sought $400,000 to make a new point and click adventure game with former LucasArts colleague Ron Gilbert.

Thousands of fans invested around $50 each within hours, propelling the fund past its $400,000 target immediately.

In a day it had phenomenally raised $1m. At time of writing it’s at $1,739,588 with 28 days to go, with 50,190 having invested anywhere from $15 each up to $10,000 or higher for pledges that offer perks such as lunch with the developers.

CASHING IN

Hyperbole on the wave of cash has come quick and fast. It’s the defining moment of the year for games already, predict some; it’s changing the model for funding, claim others.

The more fanciful claims say this is gaming’s ‘Radiohead moment’, referring to the UK band’s pay-what-you-want strategy for a suddenly released album (hopefully our description alone there can help you understand how the two are nowhere near similar).

Double Fine’s own pitch is similarly enthusiastic: “For anyone interested in the inner workings of the game industry, either professionally or as a fan, this project will be a landmark in exploring the art of development.”

Certainly, the success for Double Fine is not to be ignored – and this is shaping up to be the most public, openly developed game with a huge budget.

But this singular success needs to be understood with some reasoning. Tim Schafer’s big money boom on the site is just a one-off; a blip driven by the word of mouth that only top-flight status as an iconic designer can encourage.

Less hyped projects from less reputed developers simply won’t attract that amount of money – and you would be foolish to think the site is a goldmine.

Just ask the makers of Indie Game: The Movie, who say that instead Kickstarter is best viewed as a part of an overall dialogue with fans.

“Kickstarter is a tool to create a campaign to get your project done. But it’s not a place where people are trolling to donate money,” explains film maker Lisanne Pajot.

“No one is ever looking to donate money or give you cash,” adds co-director James Swirsky.

“Kickstarter is just a place - it’s not a massive money generator. We had to put two months of pre-work into our first kick-starter campaign, and just as much or more for our second.

"You have to set all those networks up beforehand, and when you launch you want to have your contacts list ready, and your blog distribution list ready.

"You need to give people a reason to talk about you, you need a good pitch video, you need to show that people should be interested in what you want to do as well as what you can do.

“I’m sure that’s where a lot of things stumble – the pitch isn’t strong enough, or they haven’t made it clear enough what their objectives are.

"Some people think Kickstarter is just a site that can get you free money, but there’s a lot of work that goes into getting people there.”

Pajot adds: “Our first campaign on there was definitely how we gained momentum but to get that you need work.

"If you’re doing open development, you need to maintain constant communication because people want to know how you’re spending their money. It creates another layer, another conversation on top of what you’re already doing.”

Swirsky: “Then once you’re done, there is real post-campaign… I don’t want to call it maintenance, but it is something you need to maintain. You need to keep the conversation going.”

Pajot concludes: “And you have to be willing to do that. You can’t do a Kickstarter campaign, take the money, and then go away and never say anything for two years. You have to be ready to talk. A lot.”

CROWDFUNDING’S UK CHALLENGE

In the UK, there are many businesses offering crowdfunding or crowdsourcing platforms such as www.sponsume.com, www.wefund.com, www.crowdfunder.co.uk, www.pleasefund.us.

But it is restricted by the current legal and regulatory framework in Britain which limits the potential of investing in projects for financial reward.

The barriers exist to protect consumers from risk or fraud.

Trade body UKIE is in the midst of finishing a Crowd Funding Report and Access to Finance proposal for the government that offers a way to improve the regulatory environment so fans, content producers and crowdfunding platforms can take advantage of the increasingly popular funding method.

UKIE chief executive Jo Twist told Develop: “Crowdfunding offers a fantastic new way for companies, especially start-ups, to fund their projects and grow their businesses.

"We are already seeing many crowdfunding models and platforms being used; UKIE’s Crowd Funding Report will recommend how the UK’s current regulatory environment can be improved to further allow fans, content producers and crowdfunding platforms to all take full advantage of this exciting new way of getting money and rewarding fan loyalty.”